New Franchisor's Experience with Cookie-Cutter Franchising
First, I built what I believed to be a sound model around a business that I love, and thought through each step because my goal was to franchise from the beginning. I was meticulous in executing my plan.
Second came the franchise step, and that's where I had to put myself in someone else's hands. I was surprised by a common strategy among franchise consultants that amounted to a boiler-plate, cookie-cutter approach...get an FDD written, write some Ops manuals, pay a hefty fee...then pay a bunch more money to advertise online, and then pay yet another person 40% of your franchise fees to filter through those leads and walk your recruits through the recruiting process. Even more surprising was that despite the way that many consultants sold their services, consultation usually ends at the completion of the legal documents, with very little time and effort put forth into growing and managing the franchise system.
At first, as a naïve, willing to learn franchisor, I trusted it all, only to learn later that my suspicions were right. After spending for consulting services I was still trying to figure out the fundamentals of ‘being a franchisor' as opposed to being prepared to develop my network.
Although my core business was solid, franchising fundamentals remained a mystery. A trusted attorney referred me to a mentor who listened, seemed to understand, and agreed to work with me even though development funds were now low. I began the process ‘again' with energy because finally the process was a comfortable one; one dealing with people and education, and that is how I envisioned the process in the first place.
I was fortunate to find a mentor; a true franchise consultant who really cared about who I was, what I was trying to do, and what I needed to accomplish it. I openly thank Nick Bibby. Without a sales pitch or false promises he just kicked out the old and "taught' me the art of franchising.
My goal was and is to grow a strong, "people focused" franchise for those interested in my type of work, and we have that now.
This isn't an effort to gain cheap notice, it's just my statement on this site, a site that seems to wrestle with ugly franchise problems, that there are people out there who are interested in building and offering ‘quality' in franchising.
Jason Puleio
Founder, The Barker Lounge
- Franchise topic:
Jason, what is your target market for The Barker Lounge clients? How are you reaching them?
What is your target market for franchisees? How do you reach them?
Jason, you seem to have a healthy philosophy about healthy franchising. If I'm correct I hope you make lots of money and have many healthy franchisee relationships. And I like the franchise concept. Franchisee selection will be critical.
See you on the veranda!
Millionaire Richard Quick, Esq.
Website: FranWorst.com
Millionaire Richard Quick, Esq.
Website: FranWorst.com--
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
See you on the veranda!
Millionaire Richard Quick, Esq.
Website: FranWorst.com
Millionaire Richard Quick, Esq.
Website: FranWorst.comJason,
Welcome to the daily news site for franchise owner-operators.
I think it would be of immense benefit to not only new franchisors but also franchise owner-operators to understand the complexity of building a quality franchise system from the ground up. Your story is really an excellent case study that provides considerable insight into the industry and its key players.
Keep blogging with us about individual successes (even if they're small), the bumps you hit along the way and developments in your industry.
Mr. Blue MauMau
It seems that some have forgotten the specifics of the franchising of Barker Lounge.
iFranchise was not involved with this company. According to a Franchise Times article, it was MSA that was given public acknowledgment for launching the franchise system and then Barker Lounge sought help through the Bibby Group.
I happened to hear in real time from all parties about Barker Lounge and their near miss with franchising. Mr. Puleio, you are a gentlemen, but should you feel comfortable to be quoted on your sobering experience with a cookie cutter approach of a specific franchising consultant, please let me know. I would love to publish the behind-the-scenes story. Our readers would be genuinely interested.
Let's give credit and criticism where due. iFranchise had no part to play in this story.
Mr. Blue MauMau
I don't need to check anything, The IFranchise Group has been responsible for many franchise disasters.....believe me, I know from personal experience. Mark Seibert is a used car salesmen who churns out cookie cutter franchise concepts that go no where. Boiler Plate all the way.
As pointed out, iFranchise has nothing to do with this story on Barker Lounge. But there's a bigger problem. Someone is posting the same comments that were made months ago. They don't even want to take time to write something original. Copying and pasting the same comments over and over again is considered spam. Duplicate postings have been removed. (The originals remain.)
The posting of unoriginal comments over and over again and the continued focus on iFranchise by the poster makes this reporter's nose smell something fishy. And this fish is good at smelling fishy.
Is someone trying to trash the competition, while trying to sidetrack the discussion thread under these articles?
Mr. Blue MauMau
Moderator
There have been comments on this site about a start-up franchisor of deluxe portable potties. EJ Kendall had to make a second go of her potty business. She blamed the failure of her first business on franchise development consultant Novidian. Here's what the article concludes on what to do to avoid such a mess:
Jason, would this have been enough for you? I should caution that some of the franchise consultants have quite the old boy's network of references.
I'm not sure it would have Darnelle. I contacted references that were provided to me...a mistake because you are DEFINATELY right....they did have quite the "old boy's network of references". They also put me in touch with people along the way that turned out not to be in my best interest, but instead nurturing to their business relationships.
Perhaps it may have been a whole bunch wiser for me to randomly go through their list of franchisors and call them...find out what each of them had to say. I'm not sure how I might avoided this. One thing that certainly would have helped would have been knowing about this site and reading the positive things that people had to say about the good people out there who want only to do the right thing.
Michael Webster PhD LLB
Franchise News
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
You are so very right Michael. Despite some gut feelings that grew in intensity as we got deeper into the process (and pockets), I did indeed find reasons to proceed in the face of my worries. I imagine this is somewhat human nature. It was easy to discard those gut feelings as being unwarranted or illegitimate seeing as though this big world of franchising was new to me and my trust was in those who knew it well.
I suppose it would be like a little boy being taken on a big scary ride by his parents for the first time. There would naturally be some hesitation, some gut feelings telling him "don't go"...but the little boy would ultimately fall back on the trust he has in his parents to lead him in the right direction in the big unexplored world that he's a part of.
Bottom line now that all is said and done...good lesson learned, but learned the hard way. I'm wiser and our franchise is in a better position to succeed because of all this.
Guest,
I'm not so sure that divulging sources would "save another would be franchisor the same headache that (I) went through the first time around the block". The truth is, as evidenced yet again by Nadia's latest post 'Another New Franchisor's Experience', is that this type of franchise consultation seems to be the norm and not the exception. "Would be franchisors" are probably more likely to come across this type of consultation than they are not. I think what's important for these people to know to avoid these same headaches is that franchising has very little to do with the cutting and pasting of documents or the registration of your franchise in the proper states. Anyone can do that for you...anyone! It's the ART of franchising that's important and that is precisely what is NOT available on the market!!!
Well said Darnelle. I think my trials and tribulations are far more common than not. Although I do have to disagree with your statement that it "sounds like just about every franchise consultant out there". Although I do feel like the majority get away with their cookie approach and lack of personalization, i think it's important to the franchising industry and to "would-be franchisors" to stay on the "glass half full" side of the fence by acknowledging that there certainly are consultants who do it right. Nick Bibby is a prime example. The clear vision and 'desire to do right' by him and people like him are the things that we should be talking about.
The question really is who doesn't cut out franchise networks this way?
This sounds like just about every franchise consultant out there. My money is that it is one of the biggest firms - Francorp or Seid's outfit.
Who do YOU think would crank out franchises in a cookie cutter manner? Please state why.
Most franchise documents are quite similar by their nature.There are standard terms, and any particularities due to the particular nature of the business are also rather cookie cutteresque. Restaurant contracts tend to be like other restaurant contracts, etc,
The problem with the franchise consultant arena is that, since the consulltant won't make money unless you say yes you do agree to franchise your business, most will tell anyone that any business is perfect for franchising. Saying no means you don't get a fee. DUH!!!
That is a built in tendency in the business. Some claim they don't operate that way, and I dont have enough consultant experience to know who is doing what. Frankly, I look at what I know the cost and lead time to be in a really franchisable situation and I tell them that. In almost every instance, I don't get hired to carry a franchise through its gestational period.
I tell 'em that the first step is feasibility and put a price on feasibility testing. I tell 'em they shouldn't think of committing to franchising without udergoing that first step and that that's cheap, which it is. I think they are being told by consultants that it's a simple package deal that can be executed easily if you have the right guidance. I think they are being told that because they say they are being told that. I don't think it's that simple.
The reason I don't think it's that simple is that there are so many failures amongst the new franchisors. Lawyers compete for doing "cheap" franchise documents because they don't do any due diligence on the information the clients give them. Putting the franchisor client to the tests of proving up the reliability of what is stated in the franchise documents is a lot of work that has to be paid for. I don't think consultants do a lot of that kind of work in their packages. I see so much that simply couldn't be true, that consultant/lawyer due diligence is conspicuous only by its absence.
But the fact that the paperwork looks similar does not surprise anyone who thinks about what franchise paperwork needs to look like. --
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Over the years I started several small businesses and invariably some four legged piece of franchise consulting garbage would contact me about how wonderful my life would be once I franchised the concept. These franchise consulting (insert Deadwood phrase) are like the patent (insert Deadwood phrase) feeding on the hopes and aspirations of hard working people and trying to convert them into fat, lazy, worthless parasitic scum who no longer need to work and simply live off the sweat of someone else's brow. It is sad day in this country when that becomes a barometer of success.
Here is a little lesson in reality for some of you. If you really have a good concept you will find no shortage of people who want a piece of the action. You will not need to seek them, they will find you. Successful money is always looking for a home. I know of few people of means who are always looking for a place to put their money to work. However they tend to be shrewd judges of concepts. Interestingly, I have never noticed them to be particularly tough negotiators; they simply want to employ their capital in a mutually beneficial manner. To that end they tend to realize the win-win relationships mean they will continue to have places to deploy excess capital, where as vampiristic opportunism means they will always have to look for a new partner.
So if you are sitting in your pizza parlor and some franchise consultant contacts you about the wonders of franchising you shall behold once you write them a check, realize this also means that shrewder knowing eyes have already passed you over.
FuwaFuwaUsagi
"Never underestimate the power of stupid people in large numbers."
While I don't know with certainty of any specific examples of Francorp's "cookie-cutter-ness", I did get that general feeling when I visited them. I flew out to Chicago and met Don and got the grand tour and taken out to lunch and all that fun stuff. They put on a good show. Their operation seemed to be a very welled oiled machine that just cranked out new franchise concepts. Ultimately, I chose not use their services for that very reason...because they indeed seemed like a heavy weight in the art of cookie cutting. And I wasn't looking for a franchised franchise system. I wanted a personalized experience tailored to my system's needs...and those needs were unique and specific like every new franchisor's. I did enjoy my short time with Don, but I just didn't get that personal feeling I wanted from the organization. Apparently, it's quite hard to come by these days!
...so I've heard.
You speak passionately and as if you them well. What is your role in the franchise world? Are you a franchisor, franchisee, consultant, attorney, etc...?
Do tell...
Being new to BMM, I'm finding it surprisingly difficult to blog with anonymous bloggers? I wish everyone would use their real names when posting. I'll bet there would be a whole bunch more credibility and fewer loose tongues on these boards.
Guest writes: "Former employee? What kind of person goes out of their way to negatively speak about their former employer? What does that say about that person?"
Uh, some the best informants are former employees.
Michael Webster PhD LLB
Franchise News
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"